Hot weather, slow demand result in lower local Chinese longs prices despite output cuts

As of July 10, average Chinese domestic rebar and wire rod prices have moved on a downtrend compared as even though steel production cuts have been announced in Tangshan for July, the effect on demand from the hot weather and slowdown of construction has been bigger, SteelOrbis has learned from the market.   

The average rebar price has decreased by RMB 50/mt compared to July 3, while the average 6.5 mm HPB 300 wire rod price has declined by RMB 43/mt. Rebar prices have seen a drop of RMB 37/mt compared to last Friday. 

During the given week, rebar and wire rod prices moved up first while edged down later amid the demand not seeing significant improvements. The production restrictions issued by Tangshan municipal government bolstered market players’ sentiments to some degree earlier last week, while the decreasing rebar futures prices weakened the support to rebar and wire rod prices in spot market. Speculators who earned money over the previous period chose to lock in profits in futures market, resulting in the prevailing bearish sentiments. At the same time, raw material prices declined, exerting a negative impact on rebar and wire rod prices from cost side. It is expected that rebar and wire rod prices in the Chinese domestic market may fluctuate within a limited range in the coming week.  

On July 10, rebar futures contract (rb2210) offers closed at RMB 3,654/mt ($508/mt) at Shanghai Futures Exchange, decreasing by RMB 113/mt ($16mt) or 3.0 percent compared to July 3, while decreasing by 2.01 percent compared to the previous trading day.  

Average domestic rebar and wire rod prices in China's main markets are presented in the tables below.   

Rebar prices in local markets

All prices include 13 percent VAT and all prices are ex-warehouse. 

 Wire rod prices in local markets

All prices include 13 percent VAT and all prices are ex-warehouse.

$1 = RMB 7.1926